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November 27, 2022
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80% of Bitcoin circulation supply now belongs to long-term holders

Investors are holding their bitcoins now more than ever.

80% of the Bitcoin circulation supply now belongs to long-term holders. The selling trends that usually occur during bull markets have not been seen in recent rallies, suggesting that holders across all sectors are choosing to keep their cryptocurrencies rather than sell them at a profit. This led to less ‘weak hands‘ in the market and the ‘diamond hands‘ increased.

A Glassnode report shows that the number of long-term bitcoin holders has reached a new all-time high. A record 80.5% of circulating bitcoin inventory is now being held in long-term portfolios.

This is despite recent recessions that have pushed market sentiment into extreme fear. Individual and institutional investors saw falling prices as an opportunity to “buy the dip”.

Short-term supply of bitcoin hits six-year minimum

A report from the Bitcoinist highlighted that the bitcoin supply has reached a new low. The total amount of bitcoin spent over a three-month period had reached only 16.6% of the entire current offering of the digital asset, a volume that has not been seen since 2015. This showed a strong feeling of expectation among investors, who are buying more and selling less, and moving your coins to safe wallets to keep you going for the long term.

The decline in short-term supply directly contributes to the increase in diamond hands across the market. Bringing to light another interesting trend that showed investors were going against the current with bull markets. A report from the Arcane Research showed that even when bitcoin prices were up, short-term circulating supply continued to fall.

A short-term supply drop over time will lead to a supply squeeze, where there won’t be enough supply to fuel investor demand for cryptoactives. This will inadvertently lead to scarcity and cause the price of the digital asset to skyrocket.

Whales are not left out of the action

The number of bitcoin whales has significantly decreased in recent months. These wallets with at least 1,000 BTC  store almost half of the circulating stock of bitcoins. The number of these portfolios has decreased due to these holders selling their assets or consolidating their assets into single portfolios for custody. But the remaining whale wallets are gaining ground.

The data show that despite the decreasing number of whale packs with at least 1,000 bitcoins, the volume of bitcoins that is held by the remaining whale address is only 1% less than the total number of whale addresses. This indicates that whales are buying and holding more bitcoins, and the number of diamond handholders in the market has increased.

Source: Bitcoinist

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